Peer Steinbrueck To Tax Rich Germans More Post Election

by Ulrika Lomas, Tax-News.com, Brussels

10 April 2009

German Finance Minister, Peer Steinbrueck, has distanced himself and his SPD party for election purposes from the rest of the Grand Coalition, by stating his intention not only to come down heavily on the rich by neutralising their tax havens, but also increasing the maximum income tax rate from 45% and reducing the tax threshhold for this tax rate from EUR250,000 (EUR500,000 for married couples).

In an interview with the Westdeutsche Allgemeine Zeitung published on April 8, Steinbrueck asserted that he was quite in tune with the times to reject the free market radicalism still espoused by the other parties - the salaries and bonuses of those who created the present crisis had been indecently high in comparison with modest income of decent working people. He advocates higher maximum income tax rates and lower tax thresholds for the wealthy, contending that those who benefited most during the boom times should pay up in this time of crisis.

For several weeks now and this week once again, the grand coalition cabinet has decided to strike off discussion of the anti-tax evasion legislation from the cabinet agenda, to the extent that many commentators expect that the legislation can not possibly go ahead this side of the next election. The SPD through Steinbrueck was always the most adamant about pressing ahead, and the Bavarian CSU ever the most vociferous against the bill and its effects on Germany's relations with neighbouring states, especially Switzerland, and the hounding of honest taxpayers. The bill would require all businesses and individuals doing business in 'uncooperative' countries or 'untransparent' finance centres to reveal their activities in full detail to the tax authorities under pain of tax penalties and removal of certain tax privileges.

In continuing to press the case against the perceived problem of tax dodgers and the rich in general, the SPD has seen to it that the issue remains firmly on the election agenda.

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